Trump hits some drugmakers with 100% tariffs
What's the story
US President Donald Trump has announced a new tariff regime targeting pharmaceutical companies that have not signed up for his "Most Favored Nation" pricing scheme. The plan imposes a 100% tariff on certain imported patented medicines and their key ingredients. The move is intended to push drugmakers to bring production to the US and reduce prices for American consumers.
Compliance period
Tariffs to be effective from summer
The new tariffs will come into effect later this summer, giving large pharmaceutical companies a 120-day window to comply. Smaller firms have a slightly longer period of 180 days. However, there are broad exemptions in the order. Companies that agree to join the pricing initiative or commit to building US manufacturing facilities can significantly reduce or avoid these tariffs altogether.
Incentives
Production shift could lead to reduced tariffs
Companies that shift production to the US could see tariffs reduced to as low as 20%. Those based in regions with existing trade agreements, such as the European Union, Japan, South Korea and Switzerland, will face lower tariffs of around 15%, while UK-based firms will be subject to about 10%. The administration has already secured agreements with over a dozen pharmaceutical companies, offering temporary tariff relief in exchange for pricing concessions and domestic investment.
Trade escalation
Trump's trade strategy faces pushback
The new tariffs mark a major escalation in Trump's trade strategy, especially after a US Supreme Court ruling earlier this year limited some of his previous tariff powers. The move comes amid fears within Trump's own party that aggressive trade measures could push up costs for consumers already grappling with inflation. However, officials insist the changes will not significantly impact affordability, arguing that price effects will vary but remain manageable overall.
Tariff revision
Revision of tariffs on steel, aluminium, copper imports
Along with the pharmaceutical push, Trump has also revised tariffs on steel, aluminum, and copper imports to counter alleged price manipulation by foreign exporters. The new rules will see the existing 50% tariff on primary metals calculated based on US purchase prices instead of declared export values. Products with high metal content such as household appliances will face a 25% tariff if the metal exceeds a certain percentage of total weight.